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We need some new understandings and some new laws in society about what gets done with data, says Don Tapscott. Photo: Ana Grill
We need some new understandings and some new laws in society about what gets done with data, says Don Tapscott. Photo: Ana Grill

The digital disruption

The Digital Economy warrants a fundamentally new social contract, says Don Tapscott, an expert on the impact of technology on business and society

Back in 1995, one man was able to see the enormous upheaval technology would bring to our lives. In his book The Digital Economy, Don Tapscott talked of things like networked business models, technology and privacy, and the explosive impact of new media. The author of 15 books, Tapscott is a well-known expert on the impact of technology on business and society. Edited excerpts from an interview:

How has your understanding of the digital economy changed since 1995?

The world back then was quite a different place. Google was five years away. Amazon and eBay came out just as I was completing the book. There was no mobile Web because there was no mobility. I talked about promise and peril. Some of the promise has been fulfilled and nearly all of the peril that I worried about turned out to be true. On the promise side, the book talked about how the old media is different: centralized, controlled by powerful owners, and the recipients were passive. New media is not one to many, it’s one to one, many to many, highly distributed. It’s not controllable and it has this awesome neutrality. It will be what we want it to be. I was naïve when I said that because “we" is not a homogenous phenomenon: it includes people like you and me, but it also includes people with asymmetrical power…(like) Google, the government of Iran, the NSA (National Security Agency) or Goldman Sachs. In a sense, the digital revolution is encaptured by these powerful forces and the outcome is disturbing.

Lots of wonderful things have occurred: the rise of mass collaborations like Wikipedia, social networking which has brought people together and huge changes in terms of marketing.

But if you look at the main measures of well-being in society, there’s a disturbing conclusion. All around the world, at least the Western world, there’s structural unemployment, in particular youth unemployment. This growing wealth creation (has) been captured by tiny elites, and the benefits of the digital revolution are not distributed, so we have growing social inequality.

Then somehow we’ve all done a Faustian deal with the devil: I don’t remember signing any document where we said, ‘We’re going to create all this data for these big companies: they get to own and do whatever they want with it.’

How should we deal with the problems that come with the digital economy?

Each of them requires a different set of initiatives and “we" means all the pillars of society: government, civil society, corporations, individuals. Take the data issue. I was naïve (when) I said that one of the ways that you can protect your privacy is to be careful (with) release (or) data minimization. That is no longer a viable strategy because what happens in Vegas stays on YouTube. We’re leaving this trail of digital crumbs.

We need some new understandings and some new laws in society about what gets done with data. We have to think about the issue of ownership and have a whole bunch of principles adopted by all parties. For example, information is (used) for the purpose for which it was collected and not for others without my permission, and if there’s some kind of monetization of my data, I get to participate in the wealth.

You’ve got all the Uber types saying, ‘This is the new paradigm, we’re disrupting the old high-demand industries. Let market forces figure it out.’ On the other hand, you’ve got the taxi industry saying, ‘You’re replacing all these good jobs with shitty jobs; (there isn’t) any kind of protection, no safety standards. We need to stick with the old laws for an old paradigm and apply them to this new paradigm.’ Both of them are wrong. We need a new social contract here—a combination of what both sides are saying.

The digital economy has created radically new business models, like crowdsourced work, where the company may be in the US, but the work is being done all over the world. How should they be regulated?

Again, you have this dichotomy of these two extremes and both are wrong. Some say, ‘Hey, we are crowdsourcing and creating products around the world. All these women are now getting income.’ (And) you have the traditional labour institutions saying, ‘This is piecework. We’re lowering the average wage. And it’s being done with no health and safety considerations. There’s no protection for any of these people on virtually every issue.’ You can’t apply the old labour legislation to this new environment. We need a new paradigm.

Consider these new business models, like the digital conglomerate: Google, Apple and Amazon. They can migrate into adjacent or non-adjacent industries and because they have this massive platform of data and this huge machine, they can move into this industry and provide way better value and way lower price and wipe out all these companies, but leave behind 10% of the jobs.

So this is the first time in history where we have economic growth, but we don’t have a commensurate growth in job creation.

This is a social problem and it may seem like a long way from talking about the digital economy, but the digital economy is the economy.

Back in 1995, you told us what 2015 looked like. Today what can you tell us about 2030?

We’ll be into all kinds of 3D stuff, like watching the football game on the floor of your living room or through some kind of glasses. We’ll have all kinds of wearable technology. We’re in a transition today where there’s a physical world and a digital world. You’ll see a full intersection of these where everything becomes smart and everything starts to communicate. The biggest one I see is digital currencies. The underlying technology for that block chain does hold the promise of finally bringing about these very profound changes to the deep structure and architecture of our institutions.

Something like half the world is not part of the economy. If you don’t have a bank account, you can’t save, get credit, or create a business. But with digital currencies, it’s just one of the dozens and dozens of opportunities to bring half the world’s population into the economy.

An unabridged version of this interview can be read on www.foundingfuel.com, printed in an exclusive partnership with CKGSB Knowledge.

Neelima Mahajan is a senior journalist based out of Beijing.

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